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Summer Fun manufactures flotation vests in Orlando, Florida, Summer Fun's contribution margin income statement for the most recent month contains the following data: (Click the

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Summer Fun manufactures flotation vests in Orlando, Florida, Summer Fun's contribution margin income statement for the most recent month contains the following data: (Click the icon to view the cost information) Suppose Boat Safety Cruiselines wants to buy 4,700 vests from Summer Fun. Acceptance of the order will not increase Summer Fun's variable marketing and administrative expenses or any of its fixed expenses. The Summer Fun plant has enough unused capacity to manufacture the additional vests. Boat Safety Cruiselines has offered $10 per vest, which is below the normal sale price of $15. Read the requirements Requirement 1. Prepare an incremental analysis to determine whether Summer Fun should accept this special sales order. (Enter a "O" for any zero balances. Use parentheses or a minus sign to indicate a negative contribution margin and/or a decrease in operating income from the special order) Total Order Incremental Analysis of Special Sales Order Decision Per Unit (4,700 units) Revenue from special order Less variable expense associated with the order Variable manufacturing costs Contribution margin Less: Additional fixed expenses associated with the order Increase (decrease) in operating income from the special order Decision Requirement 2. Identify long-term factors Summer Fun should consider in deciding whether to accept the special sales order In addition to determining the special order's effect on operating profits, Summer Fun's managers also should consider the following: Enter any number in the edit fields and then continue to the next question Less: Additional fixed expenses associated with the order Increase (decrease) in operating income from the special order Decision Requirement 2. Identify long-term factors Summer Fun should consider in deciding whether to accept the special sales order. In addition to determining the special order's effect on operating profits, Summer Fun's managers also should consider the following: A. How will Summer Fun's competitors react? Will they retaliate by cutting their prices and starting a price war? B. Will lowering the sale price tarnish Summer Fun's image as a quality brand? OC. Will Summer Fun's other customers find out about the lower sale price Summer Fun accepted from Boat Safety? If so, will these other customers demand lower sale prices? D. All of the above O E. None of the above. Enter any number in the edit fields and then continue to the next question. ests in Orlando, Florida. Summer Fun's contribution margin income statement for the most recen X Data Table S ha Summer Fun Contribution Margin Income Statement (Variable Costing) For Sales Volume of 30,000 Units Total Sales revenue $ 450,000 90,000 104,000 Less variable expenses: Variable manufacturing costs (DM, DL, Variable MOH) Variable operating expenses (selling and administrative) Contribution margin Less fixed expenses: Fixed manufacturing overhead $ 256,000 125,000 93,000 P Fixed operating expenses (selling and administrative) ar $ 38,000 Operating income (loss) st se Print Done s and then continue to the next

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